08 August 2013 15:07 [Source: ICIS news]
LONDON (ICIS)--Commercial nitrogen fertilizer production at the long-awaited $2bn (€1.5bn) Sorfert plant in Algeria has finally got underway and the first ammonia cargoes are expected to load in late August or early September, a senior executive at Dutch parent OCI Nitrogen said on Thursday.
While in its start-up phase, the plant will focus on ammonia output rather than urea, the executive disclosed, adding once the state-of-the-art facility is fully operational its production will be sold and traded by Sorfert.
However, OCI will immediately buy back some of the volume for delivery to its long-term customers while the rest of OCI's share will be sold to fertilizer traders and users through its existing Dubai-based trading arm.
"There is only ammonia being produced at the plant at the moment and we are still testing the storage tanks and manufacturing system with a view to building up inventories and commencing commercial deliveries later this month or in early September," said the executive.
"The whole site is being tested and the results, to date, are positive. We still require some permits but don't envisage any delays in their approval. The harbour and port systems are also being tested."
Sorfert will produce 800,000 tonnes/year of merchant ammonia and 1.3m tonnes/year of granular urea for export, with ammonia pumped along to a pipeline to Arzew port and urea moved by road to warehouses at the dockside.
OCI holds a 51% stake in the joint venture, with Algeria's state-owned oil and gas producer Sonatrach possessing the remaining 49% share.
Because of the lower freight costs from Algeria, compared to the key Ukrainian port of Yuzhny, potential destinations for the plant's ammonia output include the US, Latin America, Morocco, Tunisia, northwest Europe, and Asia Pacific countries such as India, Korea, Taiwan and Japan.
($1 = €0.75)
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